Property Question: Should I buy or rent?

Many of us are often faced with the choice of buying or renting. And even if you already own a home, the choice to upscale might end up with you rather considering to rent a larger home than to sell and purchase another.
“There are pros and cons to both,” says Craig Hutchison, CEO of Engel & Völkers Southern Africa. “The eternal truth remains, though, that property continues to be the most solid investment in today's economy, and if you are prepared to hold onto a well located property for a couple of years, you are virtually guaranteed a significant return on your investment.
“It is true that property has become significantly more expensive in the last few years – both as a result of market pressures and interest rate fluctuations, but there is something out there for everyone. Buyers should review their set of minimum requirements when contemplating a purchase – this way, they are sure to find something within their price range.”
There are a number of factors that you need to consider when buying a property, especially the various hidden costs. “In a rented property, you don't have to worry about maintenance and even some utility bills that are included in your rent, whereas you need to set aside money each month for ongoing repairs and maintenance to a property you own. However, owning your own property means that you are putting money into your own investment each month, rather than paying someone else's off – in itself one of the best retirement strategies around – even for those in their 20s and 30s,” Hutchison says.
You will probably need a much smaller deposit when deciding to rent a home, and you will have more freedom to move around the country, or indeed the world, if you're renting your home, but it's also worth remembering that when your contract with your landlord ends, you have nothing to show for all the money that you've paid across. The Landlord, on the other hand, does!
Buying your own property also brings with it a feeling of pride and accomplishment – at last, tangible evidence of the money that you work so hard to earn! Apart from the simple emotional satisfaction, you are able to express your own personality in your own property – rented homes often come with restrictions on any home improvements, and you are also likely to be reluctant to spend your own money on improving someone else's property.
However, the reality of our market at present is that there will be an increased demand for rentals, opening up opportunities for investors to purchase properties to lease out to tenants. “If you're considering purchasing property to rent out, make sure that you can afford it, as the notion that you could cover your monthly mortgage payment with the rental income is no longer necessarily true,” says Hutchison. “Investors that will do well in this market are the ones that can put down a considerable deposit on a property, if they're not buying it for cash.”
It's also important to be able to set aside part of your rental income every month to allow for unexpected maintenance costs, and a buffer to allow for further interest rate increases is important – even though opinion seems to be that the Monetary Policy Committee will not increase the prime lending rate for a while.
“Every individual has different property requirements, whether it's for renting or purchasing a property. The best route to follow is to consult an experienced real estate professional who will be able to advise you on all your options, and their cost implications,” says Hutchison.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us